bankrupt. so we have no choice. >> are you selling that concept among leadership? >> not yet. this is on their minds. what we do is on their minds. and they are putting their minds to it. so we'll see. >> mr. chairman, thank you for spending time with us today. >> thank you. >> and we are back with lori montgomery from "the washington post" and humberto sanchez from "roll call" after talking to hal rogers, the chairman of the appropriations committee. you both asked a lot of questions about how much more there was to cut in discretionary spending. it sounds as though, as the chairman says, not much. but do the members of the republican caucus agree with

that? >> i think there is attention there. several of the feshmen came here with the -- freshmen came here with the avowal of cutting spending. they said they won't come back unless they do that. it is something the committee will have to work on if they are going to do that. >> they have promised to cut spending, but as the chairman said, they have reached the bottom of the barrel on the parts that's easy and vague, and some various agencies people don't think about very much. judging from what's happening on the campaign trail, they are quite ready to make a very explicit case about medicare and certainly not social security, which is the single largest program. so getting down to 15% of g.d.p., i think spending is something like 24% of g.d.p. with hundreds of millions of

dollars in difference, they have to start focusing on these programs that are so politically difficult to cut. >> we asked where the leadership comes from that has been. where is the leadership for that? >> everyone warns of the consequences, but the public has not really seen action after several years of warning of the consequences. you don't hear them making that very specific argument for privatizing medicare these days. >> and the president is in the same position. he knows what must be done, but he can't make the case now for fear of losing the election. and again, once this election gets out of the way, there is a chance something could happen next year on this issue, and hopefully it can. >> let me go back to the conversation you had with mr. rogers about that. if this president does win the election, does he

philosophically agree with this in -- such that he would take the leadership on entitlement cuts? >> i think he recognizes that there needs to be some substantial changes. i'm not sure if he goes -- i don't know that he agrees with the ryan approach which means that you fundamentally change the shape of the program. he has dabbled at the edges. a higher measure of inflation for social security so benefits don't rise so quickly. and he increased the retirement age for mead medicare. those things are not the kind of fundamental reform that republicans want, and frankly solves the problem as the baby boomers retire. >> so as we look to the fiscal cliff and all the decisions that have to be made after the election, is it possible to know now whether or not that is going to work effectively, or will it all depend on the outcome of the

election? >> you know, i think a lot of people are hoping that they will come with an extension to somehow kick this can down the road once again. it is hard to tell whether people have the stomach to actually go over the cliff or not. there is a lot of sbre rattling over it now. but when push comes to shove -- also depending on the outcome of the election, it is hard to say what's going to happen. >> thank you to both of you for being here this week and for your questions of the chairman. i appreciate it. >> thank you. >> just a reminder that our "news makers" discussion with representative harold rogers will appear again tonight at 6:00 p.m. eastern. and you can watch it at any time on c-span.org. >> i like watching whatever

international events on c-span and i don't have to worry about some expert or supposed expert trying to tell me what i should think about it. this is a chance to see what's going on and make your own opinions about what is going on. you have some stations leaning to the left, some leaning to the right, and some saying they are trying to be down the middle, but it is hard. if someone no one is talking about it and you just hear what's said, you can make your own decision about it. >> c-span. created by america's cable companies in 1979, brought to you as a public service by your television provider. >> the annual family research council's values voters summit was held in washington friday. among the senators, kentucky senator rand paul and actor-film maker, kirk cameron. paul ryan was introduced by bill

bennett. this portion of the event about 90 minutes. >> it is certainly a privilege to serve at this values voters summit. well, on behalf of the sponsors, the american family association, the american values family research council, heritage foundation, and our co-sponsors, the international coalition of evangelical churches and the

research center, i am glad to see you. this year's theme, reduce spending, stand for traditional values, and protect america. [applause] i want to both thank you and commend you for investing your time and resources in giving voice to the values of millions and mills -- the values of millions that millions of americans care about. this year at the values voter summit, we will have one of our largest gatherings today. that comes despite the fact that families across america continue to experience a decline in their real spending power, as unemployment tins continues at record highs. the national debt has now topped $16 trillion, and the current monetary and fiscal pollen couraged by this administration devalues every -- continues at

record highs. devalues every dollar in your pocket. but you know this does not rest solely on the value of the american dollar, but rather our future depends on the stability of the american home. that core economic unit that we know is called the family. thank you for being here and giving voice to those values. the delegates for the republican convention met in florida, the democratic convention has met in north carolina, and now the value voters are meeting. you are the value voters, and this is our convention. [cheers and applause] and the intention is to -- in

two sessions! clears [cheers and applause] now, the first order of business is to amend the theme for this year's government. limit spending, champion traditional values. a motion has been made to include "no apologies. in god we trust." [cheers and applause] now, this matter requires a two-thirds vote in the affirmative. cheers [cheers and applause] all those in favor will say aye, those opposed will say no. [audience cheering "aye." ] >> those opposed? in the opinion of the chair -- let me do that again. all those delegates in favor say aye.

[audience: aye] all opposed? i guess we will just have to rule. >> all those in favor say aye. >> aye. >> all those opposed will say no. in the opinion of the chair, the value voters of america say it is time to quit apologizing for being america. [cheers and applause] and it is time we openly declare our trust in god! [cheers and applause] i would say that's unanimous. it is my pleasure to introduce our first speaker, now that we

have that business out of the way. he is a man with a distinguished career in medicine, and his interest in public service is indicative of his life's work. a desire to diagnosis problems and provide practical solutions. as an ophthalmolgist, he has devoted his career to helping people see more clearly. i can't think of a better place to be than right here in washington, d.c. too do -- to do that. since joining the united states senate in january of 2011, he has established himself as a constitutional conservative pledging to work every day to reform government and end business as usual here in our nation's capital. in fact, i'm proud to say that he has received a 100% score on the frc action scorecards for the 112th congress, voting to defund obama care and planned parenthood. [applause]

he is a devoted father and husband. married to his wife, kelly, over 21 years. together they have the joy of raising three teenage boys, william, duncan, and robert. amidst a busy schedule, he regularly volunteers to coach their baseball, babble -- basketball teams. please join me from the great state of texas -- kentucky. well, his dad is from texas. and they bonet both stand for protecting the constitution of which i am extremely grateful. please welcome senator rand paul! [cheers and applause] ♪

>> can you believe the democrats had trouble getting god into the platform? sounds like there wasn't much dissension from this group. she said she wanted $100. she wrote a letter, she said i want $100. she sent it to the president. the president said, that's cute. he said, send the little girl $5. the little girl got it. $5. the parents don't always write a thank you, so she did. she said, dear god, thank you for the $5. but next time, don't send it through washingtonment they stole 95% of it. [cheers and applause] we are now in the midst of an

election that pits one party against another. i often tell people, political parties are empty vessels unless we embue them with values. republicans must first decide and clearly claim who we are before we can ask to take charge of the country. today we are here to talk about what we believe those values should be. i'm a christian, a husband, and a father. i am faithful to my wife and my family. i try to be good at all those things. of course we all fined fall short of perfection in our lives. i have tried to adhere to the tenants of god's words in the new testament, and i try to fight for truth in my values, regardless of the political outcome, regardless of how popular or unpopular they may be. i did not arrive at my hosana through child-like faith but through a firey if you are nace

of doubt, dochoevsky wrote. i am not completely free of doubts. i struggle to understand man's inhumanity to man. i struggle to understand the horrible tragedies that war inflicts on our young men and women. and i have always had trouble grappling with the drag tragedies i encounter in medicine. as a doctor, i struggle with inexapplicable disease. terminal tumors in children. when bad things happen to go people. when bad things happen to innocent people. when mrs. jones presents with pancreatic cancer, i don't always know what to say or what to think. you can see it in her eyes. she knows what the diagnosis ultimately means.

how do you explain something so unjust and inexapplicable to her. my first patient as a medical student on the surgical service was a beautiful young woman who unfortunately presented with metastic melanoma to her ovaries. she did not die during my time with her, but i struggled to understand how her tragedy could occur in a world with purpose and design. like most doctors, or most people, really, i struggle with sometimes caring too much, and sometimes caring too little. i struggle to understand how evil individuals sometimes reap rewards and saintly heros are martyred by their fellow man. when i read "all quiet on the western front" i recoiled at the horror of war. when i read of the relentless charges of one trench to another and the utter carnage, i wondered, whose grand design is

sth? when i read "silent night" the story of the christmas eve armistice, i marveled at men that found goodness so prevalent it overcame hatred. i marveled at the men that came out of their trenches to play soccer and exchange small gifts. i was amazed at men so transformed by the moment that they were unable to fight and had to be transferred away from the frontline. this is from world war i. i realize the christmas armastice was an anomaly and millions died in world war 1 and world war ii. despithe spite the fact that few of the -- sbee despite the fact that few of those fighting knew enough of their foe to fight them or kill them. i am not a pacificst. i dismiss those that champion

war as sport and show no reluctance to go to war. i believe truly great leaders are reluctant to go to war and try mightily to avoid war. though i detestimony -- though i des -- detest killing, i could kill someone who threatened my family. i agree that there is such a thing or a christian or just theory of war. that a just war is a war of self-defense. at the same time, i am conflicted. i don't believe jesus would have killed anyone or condoned killing, perhaps not even in self-defense. i'm conflicted. the corsening of our culture

toward violent death has -- 50 million unborn children in 30 years. i don't think a civilization that can endure that does not have respect for all human life, born and not yet born. [applause] we have a great many prostheses problems in this country to solve. i believe there will come a time when we will be judged how we took a stand from the moment of con sention until our last natural breath. [applause] >> as a teenager, i gave my first public speech in my church. i wasn't very good. i hope i'm getting better. i wouldn't think at the -- i

would think at the time i was awful. my hands sweat, my arms shook. i am not a natural at this. but because i wanted to take about things that were important, i persisted. i chided my church as a senior in high school for not seeming to care about the not yet born, for looking the other way, and for not taking a stand on life. one thing i promise you, and i promise my constituents in kentucky is, i will always take a stand for life. [applause] though i believe in limited powers for the federal government, i believe as our founders did, that primary among these powers and duties is the protection of life. the government cannot protect liberty if it does not first protect life. ultimately -- [applause]

ultimately, as christians, our message should be a message of hope. we need leadership who can find hope in optimism amidst the fiscal pricis we face. we need leaders that can transform the coldness of austerity into the warm embrace of prosperity. we need leaders that can extoll the american dream, who are proud of america, who will convince us to believe in ourselves again. we must embrace the values of life, liberty, and prosperity that will lead this country back to greatness. and we should do so proudly as christians. i agree with ralph reid who often states that the first amendment is here to keep government out of religion, but not to keep religious people out of government. [cheers and applause]

do we keep our values in tact as we fight the fight. often our society is measured by man's inhumanity to man. i'm not asking you to love someone else's neighbor. i'm asking you to love your neighbor. [applause] but even more importantly, to love the people close to you. success or happiness or whatever you want to call it is in the particulars, it is not in the abstract. it is sitting right next to you. loving a man or woman might find you happiness. your interaction with those you love is where you should look. in that relevant many -- realm

may lie, i believe, the key to happiness and success on earth. for me, my serendipity did not happen in a lab, i didn't discover the cure for a horrible disease. i have not solved the world's problems in politics. just wait, i'm trying. but once upon a time i did come upon a girl at an oyster roast. a girl who makes every achievement or not have important. no matter where you are, what your path is, what path you choose, don't lose what's important. the important things are the shared experiences of the ones you love. and ultimately what happens as you chart your course is how you treat the people around you. particularly those close to you. all else in life ultimately withers and fades. each of us today must examine

what is important in your life. for me it can be summed up in a dedication from my book that i wrote. the dedication is for my wife. what are the important things? i scratch my head. silent enough to hear my watch tick. have i even are had time to consider the important things. even when i sit still, i sit still in a hurry. but beyond, between, and above all else, you, the girl, my wife, my love, can and do complete all sillogisms my circular brain can create. for me, you are the important things. for us as a nation, as a people, we need to decide what are the important things. they are not all in politics. they are not all here and present where we can fully understand them. i think there is a crisis. it is not just a fiscal crisis. i think it is a moral crisis. i think it is a spiritual crisis.

[cheers and applause] i don't think the answer is in any politician. i don't think the answer is in any particular law : will are -- in any particular law. i think we need to somehow find our way back to god. [applause] and i think we find that by taking the time from our busy lives, from everything around us, taking the time to reflect what are the important things? i hope we will find that out. i hope we will reflect, and i hope we will find spiritual renewal as a country and a people. thank you very much. [cheers and applause]

>> thank you, senator. we're very excited that this year's value summit coincides with the release of the new film "monumental" featuring kirk cameron. tonight we will be giving a special screening for everyone. we would like you to now take just a moment to look at the monitors for a preview of this movie tonight. >> remind you of your heritage. ♪ >> instead of ideas that are being implemented and advanced, this capital at this time, is terribly frightening to people

who are students of history. ♪ when you look at the roman empire, it is a parallel to what is going on in america, are absolutely frightening. >> and the question is, are we going to go the right path ourselves, or are we going to continue down the wrong path that so many nations have fallen into? ♪ >> that will be tonight at 9:30

right here in the ball room. ladies and gentlemen would you please welcome actor producer, kirk cameron! ♪ well good morning. it is so inspiring, it is so exciting to be here this morning, to be part of the values voters summit. i'm deeply honored and privileged to be here with you, to be part of this historic event, and to be a part of this great movement that is sweeping our nation right now. we are so excited and we are so hopeful. i was asked to come and be a part of this, this morning. i think in part because of a brand new film that i recently

produced called "monumental." "in search of america's national treasure." [applause] and it was a very unique project for me personally to be involved in. because i didn't approach this film as an actor. i didn't approach it as a politician. i approached it as a father. i am a father of six children together with my wife chelsea, and i am deeply concerned about the world that they are walking into. let me back up just a little bit. i did not grow up in a family of faith. i didn't grow up in a politically active home. today as an adult, i refer to myself as a recovering eighthiest. -- athiest. i left my faith in athism a long

time ago. i love god and i'm so thankful and grateful to god for who he is and what he's done in my life. [cheers and applause] and although we never talked about the importance of voting for our leaders in this country locally and nationally, i now understand as a dad that someone is going to be steering the ship . that there are leaders that are critically important to the future and the blessings of the land that we live in, and not just for me, but now as a father, i am looking at the fruit that is hanging on the branches of our life, our children. they are our ultimate fruit, and they, if they are healthy will produce seed and fruit themselves, and we want them to be in a land that is blessed as well. so that's really the fuel that's rocketing me forward to want to do something and be involved in this arena that you all

understand is so very critical and important, particularly in this election year at this time in history for our country and for the world. . >> it is frightening was happening spiritually around the world.

as a dad, what can we do about this? i turn on the news. [laughter] and i find that most people are playing the blame game. most people are getting rather vocal about all the wrong things other people are doing. i find the left lines the right and the right blend the right and the rich and the poor and the poor berlin the rich and our government is blaming big business and big business is blaming government. and to the church is blaming hollywood and the media is planning religion for the ills of the world. with all this blaming going on, i find it difficult to hear a clear voice that will take is out of this mess. who will lead us out of this wilderness to the place of blessing? maybe i'm missing the obvious. maybe it is simpler than all of this. could it be that we simply have forgotten what made such a great

nation in the first place? [applause] i thought if only i could go back in time and simply talk to the brave men and women who were there at the founding, whoere there, our forefathers, if only my name was marty mcfly and i had a delorean - what do we need to change in order to move forward with a blessing and strength? how do we return to the most prosperous and secure and blessed nation the world has ever known? they could tell us. my name is not marty mcfly and i don't have a time machine. i got on a plane and i went to england and i began retracing the escape route of the programs before they were called pilgrim's.

they were the separate tests. to understand who they were and why they did what they did. what was the fuel driving them to risk everything against all odds and then lay down their lives for the sake of their children and how did they build this? i followed them out of england into the dungeons and the castles they were thrown into, there underground secret worship meeting places and then made a strategic retreat out of england to holland and they stayed there first for 12 years under the care of their beloved pastor, john robinson. john robinson is affectionately known as the founding father of the forefathers. he taught them all of the nation building principles that the pilgrims then brought with them on the mayflower across the ocean to the new world. they began running those plays.

they began implementing the very thing that america has become famous for - electing your own officials and leaders in government, a limited government, a free enterprise system. these are the kinds of values and these are the kind of the essential principles that inspired later generations with our founding fathers and beyond and put so much power in the churches and communities and they build a nation because of their sacrifice from the ground up and the inside out. it started in the heart and i wondered why i was never taught

these things in school. i was taught that our founders were a bunch of atheists, agnostics, and deists and all these ideas came from ancient rome and greece. when i did the research myself and began examining the original source documents like bradford's journal, the plymouth and foundation, the sources where we learn about these amazing people, i found that they learned these things from a very different source and at the very heart of the treasure that made america so unique or the very eternal principles that had not been tested and tried from the ground up for 3000 years since the ancient hebrew republic under moses. they were doing something utterly unique in the history of the world. and we, today, are the beneficiaries of their labors and their sacrifice.

i, for one, am truly grateful. i know that you are, too. [applause] my hope was that in the year 2012, we would be able to look back and maybe, just maybe, they have enough foresight to know that we would get off track as a nation, that they would know coming out of england where their economy was collapsing, where there king had tripled the debt, when he enslave the people and declared himself in essence to be caught on earth -- the darkness was closing in on them culturally, economically, socially, politically. they did not talk their heads between their knees and say it's all over let's get ready for the end. they said let's get off the

defense and get on an offense and make a 500-year plan and build a new nation. [applause] knowing that the human heart is ultimately bent toward serving itself and prone to things like greed and pride, perhaps they would have had the foresight to put some guardrails in place. perhaps there would have left us a reset button. so that if we ever got off track, we could return to original factory settings. [laughter] that was my hope. i looked and i looked for it. i found it. they left it for us. they left it in the form of the largest solid granite monument in the united states of america and most people have never heard of it. i had never heard of it before i made this movie, "monumental."

it is sitting on top of a hill in massachusetts. it is 180 tons of granite making it the largest solid granite monument in the united states of america and it lays out our forefathers strategy for how to build and sustain a free and just society. it is called the monument to the fore fathers and it is now hitting behind a forest of trees in a residential area. you would not know it is there on less you stumbled into it. or you're going there specifically to see it. i must explain this monument to you. it is utterly fascinating. she is 81 feet tall. her name is faith. she stands tall with her finger pointed to heaven, the gods have been with a star on her forehead representing wisdom and enter left hand, she holds a word of god.

it is specifically the geneva bible which is the bible the pilgrims brought across with them on the mayflower. this is the bible that predates the king james bible. they brought that with them because our forefathers believe that you must have faith in the true god of heaven and in his word and his word would give you wisdom to know how to live and to govern your society in a way that would be a blessing to all. her foot is set up on top of a giant rock which is plymouth rock. she's standing on a platform that is supported underneath her by four smaller statues because our forefathers believed that faith was at the top, faith in god and his word, and it would be expressed it was genuine in these four ways -- first, it would be expressed through an

internal transformation of the heart represented by morality. morality is there etched in granite sitting on a chair and in her right hand, she is holding the 10 commandments. in her left hand, she is holding the scroll of revelations. to her right, is inscribed in the granite, prophet and there is moses holding the 10 commandments to write and to her left is inscribed the word evangelist and there is one of the evangelists penning the gospel to her left. in our forefathers understand, faith first expresses itself not as an ex journal standard of morality encroached upon the people but as an internal

change of the heart that is produced by the power of the gospel. then you have the standard of the commandments, the internal rules of rights, that ban form your morality so that you know what is good and what is evil and you do not confuse the two. if the morality is put in place, they believe that would naturally flow to a right understanding of which lost to past and law is the second statute under the second corner of the platform she is standing on. these laws are just and merciful laws and there is the man of law sitting there with a law book in his hand and is and is out stretch in mercy and to his right is justice and lady justice is there. she has a sword in one hand and the scales in the other hand so that there would be fairness and justice in all laws, that the punishment would fit the crime. to his left is mercy.

and under law, the books of law as he is holding, is faith was holding the book of books. bill laws that the forefathers would make would never be in violation of the internal rules of rights. you would never pass a law of murdering someone else. you would not pass laws that would amount to stealing someone else's property because these would be an infraction and violation of the ultimate loss that would produce blessings of the land. now that you had civility in your society through laws that were based on my right morality, you could then educate your children and it was imperative to them that you did because you had to educate your children and your children's children to pass your values on to future generations or they would be lost. education is a woman sitting

here in her chair with a wreath of victory around her head. she is holding books of knowledge and to her right is a young mother instructing her child in the way that he or she should go and the child is copying down things he is learning from his mother. on her left is wisdom, depicted by an older man with a long, gray beard and he is holding a bible in one hand and a globe and the other. -- in the other. if you train your child in the way he should go, when he is old, he will be wise and not depart from it. fourth, the culmination, the result, the reward of following this strategy, this matrix of liberty was liberty. liberty man is seated in his chair and he has the farmer still on his body. his sword is tucked back in its

sheath. he is at rest. the chains on his wrists and hands have been broken. there is a lion head that is draped over his shoulder and the height of this line of tierney has been flung over his back. he has been defeated. to his right is the picture of liberty man with his foot on the chest of tyranny having overthrown him and to his left is his wife, her name is peace, and she is holding a cornucopia that is a bounty and an overflow of blessings and the good things for her family and her community. this is the strategy for producing liberty in our country has given to us by our forefathers. we know what they believe in that is how they lived. i find it interesting that today one of our political party is wondering whether to keep the platformd' in the

while according to our forefathers, god is the platform. [applause] i said earlier that i made this film," monumental," in search of america's national treasure which in fact will be available for you who are interested to see tonight at 9:30 p.m. in the theater. i did this for the sake of my children. i did not do it for my children alone but also for your children and for your children's children and for their children. [applause] and my kids and your kids are

the fuel that drives me to be passionate about another issue and that is the sanctity of life. [applause] while some people are able to look at this issue of the sacredness of a heart beat in a woman as perhaps a political issue or perhaps a world view or an ideological or philosophical issue, for me, it is a family thing. i have six children. four of my children are adopted. my wife is also an adopted child. [applause] if it were not for the young lady that chose to give my wife a gift of life, my two natural born children would not be here either. my whole family is here today because of the gift of life and adoption.

i believe that adoption is the answer to the abortion crisis. [applause] we change only two letters in the word abortion and we get the word adoption and it reflects the heartbeat of god. and so, i want to thank all of you for all of your tireless efforts and your hard work of love and caring for young ladies who find themselves in a difficult and desperate situation with the pregnancy they don't quite know how to handle and you have taken the time to tell them the truth about the heart beat that is in her womb and there is a young child who is waiting for its first breath, its first birthday, its first step, its first day of school, his or her marriage, his or her first

child and you are walking her through that process and showing her genuine love and hope. you have provided blessings for millions of people as a result. and i, for one, and the recipient of that hard work and i'm grateful. i am grateful for you. thank you. please pledge with me to continue to pray for our nation and for the election coming in november. make sure you are prepared by registering to vote and helping your friends and family make sure they are prepared to register to vote and then go out on election day and a vote your conscience and your values. they are critical. thank you very much and god bless you. [applause]

♪ ♪ >> thank you so much. congressman kantor. it is morning in america. how would you like to hear from dr. bill bennett next? he consistently rates and our evaluation as among one of our favorite speakers we're delighted to have. he will be introducing our vice- presidential candidate, paul ryan afterwards.

although he is well known as a republican, he is often -- he has often cross party lines to pursue important common purposes. he has worked closely with democratic leaders to fight for our culture against the decline of popular culture and to end the world wide religious persecution. thanks to bill bennett's brilliant mind, his writing and speeches, he has an extraordinary influence on america's political and social landscape. ladies and gentleman, please give a warm welcome to dr. bill bennett. [applause]

it is said that lincoln only read two books, the bible and shakespeare. my text today is shakespeare, all too apt, macbeth, act four, scene 3. i think our country thinks the

need the yoke. it weeks, it believes, and each new day, a guest is added to her wounds. what are those loans? the men and women here before me this morning know this better than i do but a quick recitation -- the employment rate is stuck above 8% for 43 straight month, the unemployment rate when barack obama took office was 7.8%. the labor force is shrinking to record lows. people are giving us -- given up looking for work, especially men pretty of his participation rate in the labour force for man was below 70%. , lowest ever. has president obama took up was, median household income declined more than $4,000. half of recent college graduates are underemployed or vastly unemployed. more people are on food stamps

than have ever been on food stamps before. almost 50 million. poverty is the highest number we have ever seen since the census bureau began keeping track, 46.2 million people. black unemployment is at a record high, 14%. these are-this. gashes. as mitt romney told the naacp and a smart appearance and in a good speech, it was courageous. [applause] if i am president, just one will be creating jobs. i have no hidden agenda. if you want the president will make things better in the african-american community, you are looking at him. good for mitt romney. [applause]

macbeth says the country sinks beneath the yoke of death. barack obama took office and the national debt was $10.60 trillion. today, it is now more than $16 trillion. that is heavy. sooner or later, that debt will sink us. the burden are more than economic. you did not meet -- you did not invite me here to talk about economics. it is culture. cultural and spiritual and moral power that troubles us. does not just about our money. it is about our morale as a nation. we,e's a sense that america, are heading down, that the shining city on the hill is

growing dim. 57% of americans believe we are in decline as a civilization. think about that -- more americans than not think we are in decline in civilization. in the long story of inhumanity and misery which is human history, the american achievement is high and it is unique. most of us today think it may be ending. is this what has happened to us? if so, than this loss of morale is the worst thing this president has done to us. he has dumped our national morale and pride. i work for a president, ronald wilson reagan, who raised -- [applause]

he raised the economy, stared down the soviet union, lifted morale. he was the captain of the ship that took the wheel in stormy seas, calmed the passengers and the city. the opposite has been done in the tenure of this president. it gives me no pleasure to say so but it is true. what is this? why is this? what does this? where does this come from? 64% of americans believe we are on the wrong track. if those 64% would just vote on track -- [applause] some tell us that things are getting better. if things are getting better,

why are people feeling so bad? people are saying things are better, why aren't things better? they're not. i will tell you another reason why today the country weeps and bleeds as shakespeare says. it weeds and leads for man who literally blood, were killed and brutalized by a fanatic mob in benghazi. the reaction of our leadership was not anger, not furey, not the terrible swift sword, but to the bleeding, the slaughtered and the spectacle, it was bleeding a sheepish statement of weakness and wondering aloud by the secretary of state and other is whether our own freedoms, our own constitutional freedoms go just a bit too far.

the moslem mob brutalizes and murders an american ambassador, a representative of the united states of america. to disgrace him and disgrace us, they would murder us and brutalize us, too. our government reacts by shattering and shaking and wondering if the consequences of our first amendment. it blends an inconsequential fool of a film maker with the paltry influence for the venom on least in another part of the world. god help us, god help us. well, there is another line in macbeth -- it seems i hear a voice. me thinks we hear a couple of voices. in the midst of this, there was

a voice, one of mitt romney. he did not hesitate. he thundered of this -- i am outraged by the attacks on american diplomatic missions in libya and egypt and by the death of an american consulate workers in that gauzy it is disgraceful that the obama administration's first response was not to condemn attacks and our diplomatic missions but to sympathize with those who waged the attacks. that is mitt romney. [applause] [applause] what ever timing, wording or

parsing one might want to bring up, one may want to suggest to improve on his remarks, his words had a shock effect, didn't they? they had the shock effect because they were true. when they are condemned so broadly, so almost universally among the establishment, it is likely they are true. [applause] these were true for another reason. what he said, let me read again -- i am outraged by the attacks on the american diplomatic mission in libya and egypt. it is disgraceful, disgraceful. that the obama administration's first response was not to condemn attacks and our diplomatic missions but to sympathize with those who waged the attacks.

mr. romney was talking about other things as well when he talked about this attack. he was talking about a history. his words had a shock effect because in addition to being true, they were an unveiling, a revelation, a stripping away, showing the feckless core of beliefs and sentiment that no animates leadership in america. where do we stand with this part of the world? where do we stand with moslems to do this to us? where we stand with the country that hesitates to respond? is it an ally or not? we don't know. the answer is not clear. much of the press quickly jump in on mitt romney to kill this truth in the womb, something it as well practiced at. [applause]

but that revelation and that truth will not die, or so i hope. because the message was received. i heard it on my radio show. i heard it from me early but that was not so important. i then heard it from my audience, from outside the precinct, the normal suspects, if you will. outside the precincts in the grip of a new intelligentsia, outside of the places i call the place is defined by advanced attitudes and professed moral and intellectual smugness. it was heard in texas. [applause] when ted cruz was on my show, the day after he was elected, he

had chick-fil-a at his reception -- [laughter] he said there is a new wind blowing, we're taking our country back with our values and our freedoms. [applause] i said where are you talking from? he said texas. i said i know it is true in texas. i wanted to be true everywhere else. california continues to lose the business it is losing to texas, they might figure it out. [applause] otherwise they will be the lindsay lohan of states. [laughter] just can't figure it out. what did i do wrong? [laughter] the message mitt romney gave,

the message mitt romney gate was hurt, it was heard and repeated, it was echoed, approved and the american people applauded. god help the to be seen elsewhere in ohio and colorado [applause] and in iowa and in virginia. [applause] and everywhere else and i will end. [applause] this brings me to wisconsin. are you ready? get out of the way, then it. rigid bennett. it is just like commencements,

get that man off the podium. get on with this day. paul ryan -- [applause] i was just a short of the room because paul ryan needed to an interview. i said do you know -- never mind. [applause] paul ryan tells me in any text two weeks ago that his job was to carry my coffee in one hand and his book of virtues and the other hand. [laughter] now i go around bragging that i know paul ryan. [laughter] well, sir, paul, if there is any caring to be done, in case you think i am too old and i am not -- i was in texas tuesday night

debating chris matthews. i am not too old for this. [applause] i'm just getting better. [laughter] my doctor said i am getting shorter. anyway -- if there is any caring to be done, in case you think i'm too old for it but if you do, i will carry your jacket and your coffee and your books while you take it to them, mr. chairman. [applause] he did work for me and jack kemp. he likes to say he worked for jack kemp. [laughter]

you can't help but. we are friends. we have stood on the top of colorado mountain peaks together. i got there three after -- three hours after he did but region [laughter] i got there. the mountain knew it had been climbed when i got there. [laughter] my younger son, when he was 14, all i ask him to go hiking in colorado. my son asked if we're going on the trail and paul said we are going straight up. straight up they want and my 14- year-old was gasping and decided he would do better next time. he had the chance last summer in colorado. now come joe bennett, second

lieutenant in the marine corps, thank you very much -- [applause] stayed with him. so the paul's father and law runs the the the catalog and his brother-in-law who is an iron man. i - [laughter] i stayed at base camp -- [laughter] in case there was trouble. [laughter] no, i i went behind slowly. paul said to fight together and i said i know the resumes of this crowd, you have to be kidding. they went way ahead. they all stayed together. i just stayed behind. i was dealing with new-found humility. a guide pass me on the trail and said you look familiar. i said i used to be but not anymore. [laughter]

i heard paul ryan is a appear. i said he is about 3 miles ahead. [laughter] we have come to know a lot of each other's families in this way and other ways. i admire him very much. i admire his faith and courage and his plot guinness and his sense of humor and he is so well grounded in the sense of himself. i gave and the big hug. he has not changed a bit. in knows we stand for. in our time, just as important, he knows what he won't stand for. [applause] in the book of virtues, the chapter of courage, are stull says courage is the most important of purchase because it enables the other virtues to have effect. courage he said is the secret of

democracy. it still is. paul has it. in most of the work and does have to think and he knows how to achieve. he gives me real hope, not the flimsy kind and so he should to you. he will be an outstanding vice- president for mitt romney and he will bring his own brand of courage, his intellect, an honor to the team. mitt romney has been consistently right in his choices and reactions, some of which i have cited this morning. no more right was he when he was in the business of selecting a running mate he was right to denounce terrorist instead of offering excuses. he was right in his address is to these various groups and his instincts and reactions have been right throughout this campaign. he is right about what it will take for america to get back to work and he is right that paul ryan is the best person to help and

do this. to borrow some words from my very smart wife -- these two these two, romney and ryan, will not fail. paul ryan. \[cheers and applause/] ♪ ♪ >> hey, everybody. how about this guy, huh? man. thank you so much. wow. let's hear it for bill bennett! thank you so much.

he did take my jokes. when bill bennett has climbed a mountain, the mountain knows that it has been climbed. [laughter] he and i go back a long way. you know, i lost my dad when i was a young guy. i went through life with really important mentors. none were more important than from, bill bennett. \[applause/] [person yelling] >> thank you so much. i appreciate your support. thank you. thank you.

[crowd chanting usa] >> it is good to be here. it is a special honor. it is good to be part of a values voter summit once again. and this time, i bring greetings from the next president of the united states, governor mitt romney! \[cheers and applause/] in this election, millions of americans count themselves as value voters. i'm a value voter, too. in 53 days we have a choice between two very different ideas about our country.

how we were meant to live, and what we were meant to be. it is the kind of choice that can never be taken for granted. peace, freedom, and civilized values have enemies in this world. as we have been reminded by events in egypt, libya, and yemen. we have all seen the images of our flag being burned and our enemies under attack by vicious mobs. the worst of it is the loss of four good men, including our ambassador to libya. they were there for the most peaceful purposes in service to our country. and today our country honors their lives and greeves with -- and grieves with their families. \[applause/] all of us are watching events closely. we know who america is dealing

with in these attacks. they are extremists who operate by violence and intimidation. the least equivocation only makes them bolder. look across that area. what do we see? the slaughter of brave dissidents in syria. mobs storming american embassies and consulates. iran four years closer to getting a nuclear weapon. israel, our best ally in the region, treated with indifference bordering on contempt by the obama administration. \[applause/] amid all these threats and dangers, what we do not see is steady, consistent american leadership. in the days ahead and in the years ahead, american foreign policy needs moral clarity and firmness of purpose. \[applause/]

only by the competent exercise of american influence are evil and violence overcome. that is how we keep problems abroad from becoming crises. that is what keeps the peace. that is what we will have in a romney-ryan administration. \[cheers and applause/] in the all important election of 2012, values voters are also economic voters. this election we'll hold the incumbent accountable for his decisions. it is true that president obama had a lot of problems not of his own making. but he also came in with one party rule and a chance to do everything of his own

choosing. the obama economic agenda failed not because it was stopped but because it was passed. \[cheers and applause/] that's a key distinction. \[applause/] and here is what we got. prolonged joblessness across the country. 23 million americans struggling to find work. family income in decline. 15% of americans living in poverty. the record is so uniformly bad, that maybe you noticed something. president obama himself almost never even uses the word "record." that is, except, when he's trying to trade on the record of bill clinton. in his conventional speech, the president never said that

simple word, "record." he didn't say the other word "stimulus" either. because he wasted $831 billion of borrowed money. at a time of mass unemployment, he didn't even say "unemployment." because we're in the slowest recovery since the great depression. by the way, he didn't even use the word recovery either. never mind that recovery was what all americans expected from barack obama. you see, he wants us to forget all of these things. and lately, he's been trying out a new tactic. it is the classic barack obama strawman. if anyone dares point out the facts of his record, why they are being negative and pessimistic about the country. the new straw man is people hoping for the decline of america. you know, it is pretty sad, but this is the closest president obama can come these days to sounding positive himself.

but we have to face up to all that has gone wrong these past four years so that the next four years can be better. \[applause/] ladies and gentlemen, we cannot afford to make economic failure a two-term proposition! \[cheers and applause/] you know lately the president has been trying out sports comparisons. he compares the fourth year of his term to the fourth quarter of a basketball game. you can expect more of this. because if there is one thing the man can do, it's talk a good game. [laughter] the only problem is, the clock is running out, and he still hasn't put any points on the board. \[applause/] his whole case these days is basically asking us to forget what

he promised us four years ago and focus instead on his new promises. that's a fast move to get around accountability. he made those ringing promises to get elected. without them, he wouldn't be president. and now he asks as if it is unfair to measure his performance against his own words. but here's the question, if barack obama's promises weren't good then, what good are they now? if we renew the contract, we're going to get the same deal. if we renew the contract, we'll get the same deal, with only one difference. in a second term, he will never answer to you again. in so many ways, starting with obama care, re-electing this president would set in motion things that can never be called back. it would be a choice to give up so many other choices.

when all the mandates of government-run health care comes down, the last thing the regulators will want to hear is your opinion. when the obama tax increases start coming, nobody in washington is going to ask whether you can afford them or not. when all the new borrowing brings our national debt to $20 trillion and then $25 trillion, nobody is going to ask you about the debt crisis or even help you prepare for it. but we the people need to think ahead. even if our current president will not, in order to avoid the crisis while there is still time. everyone knows that president obama inherited a bad economy. four months from now, when mitt romney is sworn in as president, he will inherit a bad economy. but here's the difference. when a romney run administration takes office, we will also take responsibility. \[cheers and applause/]

instead of dividing up the wealth, our new president will get america creating wealth again. \[cheers and applause/] we're going to revive free enterprise in this country to get our economy growing faster and to get our people back to work. \[cheers and applause/] on the path that this president has set, by the time my kids are my age, the federal government will be far bigger and more powerful even than it is today. at that point, this land of free men and women will have become something it was never intended to be. we are expected to meekly submit to the state. but i have a different idea, and i'm betting most americans share it.

i want my children to make their decisions to define happiness for themselves and use the gifts their god gave them and live their lives in freedom! \[cheers and applause/] that's the american idea. \[cheers and applause/] you know, you say things like this and our opponents will quickly oppose you of being, quote, "anti-government." president obama frames the debate this way. because here again, it is the only kind of debate he can win against straw man arguments of -- arguments. no politician is more skilled -- [crowd chanting "u.s.a."]

\[cheers and applause/] \[cheers and applause/] we all know this. no politician is more skilled at striking heroic poses against imaginary adversaries. nobody is better at rebuking nonexistant opinions. barack obama does this all the time. in this election, we are going to call him on it. \[applause/] the president is given to

lectures on all that we owe to government, as if anyone -- who uses rampant government power. he treats private enterprise as a revenue source for government. he used government as the recontribute tore -- redistributor and allocator of opportunity. the results are in for that, too. here we are, four years under economic stewardship under these self-proclaimed advocates of the poor, and what do they have to show for it? more people in poverty! after four years of dividing people up with a bogus rhetoric of class warfare, just about every segment of society is worse off. to see this played out in any country would be bad enough. to see it becoming the daily experience of life in the united states is utterly contrary to everything we are entitled

to expect. mitt romney knows that this country is made for better things. to borrow the words of another mentor of mine, jack kemp -- \[applause/] i had to do that for dr. bennett. mit and i understand that no government in history has been able to do for people what they were able to do for themselves when they were free to follow their hopes and their dreams. \[applause/] under the current president, we are at risk of becoming a poor country. he looks to government as the great benefactor in every life. our opponents even have a new motto. they say, quote, "government is

the only thing that we all belong to." i don't know about you, but i never thought of government as something that i belong to. as a matter of fact,of the seven times i have been sworn to congress, i have never taken an oath to the government. the oath that all of us take is to support and defend the constitution of the united states under which government is limited and the people are sovereign! that's what we do, that's who we are! \[cheers and applause/] [applause] in the experience of real life,

the most important things we belong to, they have a very different hold on us. i'm catholic. not because anyone has ordered me to accept a creed, but because of the grace and truth revealed in my faith. aboutat's how we all feel the faith that we hold. in the same way, we americans give ourselves to every kind of good cause. we do this for the simple reason that our hearts and conscience want to fill a place that someone else cannot fill. it is like that way in communities, too. the whole life of this nation is carried forward every day by the endless unselfish things people do for one another, without giving it much thought. in books, they call this civil society. in my own experience, i know it

as -- as jainsville, wisconsin. -- janesville, wisconsin. \[applause/] janesville is a place like 10,000 others, where a lot of good happens without government demanding it, claiming it, or taking credit for it. that is how life is supposed to work in a free country. thepresident's telling government is a benevolent presence. when government enters the picture, at private institutions are so often brushed aside with suspicion or even content.

this is what happened to the catholic church and catholic charities of this past charity when the new mandates of obamacare started coming. you are going to do things the government's way. ladies and gentlemen, you would be hard pressed to find another group in america that does more to serve the health of women and their babies than the catholic church and catholic charities. [applause] suddenly, we have obamacare bureaucrats presuming to dictate how they're going to do it. this mandate is not a threats and insults to one religious group. it is a thread an insult to every religious group.

he and i are honored to stand with you in defense of our religious liberty. i can assure you, when mitt romney is elected, we will get to work on day one to repeal that mandate and all of obamacare. [applause] finally, when he tries to make a big government sounds reasonable and inclusive, the president likes to say, we are all in this together. he has another -- anyone who questions the wisdom of this policies must be lacking in compassion. who else would question him but

those mean people? we are all in this together, it has a nice ring. how hollow it sounds coming from a politician who has never once lifted a hand to defend the most helpless and innocent of all human beings, the child waiting to be born. [applause] giving up any further pretense of moderation on this issue and in complete disregard for millions of perot-like democrats, president obama has chosen to pander to the most

extreme elements of his party -- pro-life democrats, president obama has chosen to pander to the most extreme elements of this party. the ticket stands for an unqualified right to abortion at any time under any circumstances and even at taxpayer expense. when you get past all of the president's strongmen, what we believe this plan to state. these vital questions should be decided, not by the caprice of unelected judges, but by the conscience of the people and their elected representatives. [applause] in this good hearted country, we

believe in showing compassion for mother and child alike. we do not write anyone off in america. especially those without a voice. every child has a place and purpose in this world. everyone counts. in a just society, the law should stand on the side of life. [applause] so much of our history has been a constant striving to live up to the ideals of our founding period about rights and open the source. are upon its convention, -- at our opponents' convention, a fight broke out about the mere mention of that voice. our rights, from nature and

nature's god, not from government. that is the american idea. a disregard for rights, a growing government and a static economy, a country where everything is free but cost. this is where it is all tending. this is where we are being taken by the present administration. this is the road we are on. that road has -- [applause] we can be confident in the rightness of our cause and in the integrity and readiness of the man who leads it.

he is a solid and trustworthy, faithful and honorable man. not only a defender of marriage, he offers an example of marriage at its best. not only a fine businessman, he is a fine man. worthy of leading our country and ready to lead the great turnaround the we have spent four years waiting for. i am not the only one who has told mitt that maybe he to talk more about himself and his life. this is a guy turned the entire company into a search and rescue operation the moment he heard that a colleagues daughter was missing. he is a man who could have easily contented himself with giving donations to needy causes.

everyone will tell you that he has always given himself. he is one of those guys who does not exhorts and oversee good works, but shows up and does the work. mitt romney is the type we have all run into in our own communities. he is right -- he is their right away when there is need, but never first in line when praise and credit are handed out. he is a promise keeper. he is the kind of person every community could use more of. he will be the kind of president who brings out the best in our country. [applause] when he asked me to join the tickets, i told him, let's get this done. that has been my message ever

sense. i am asking all of you the same. we know what we are up against. we know how desperate our opponents are to cling to power. we are ready. i hope you are, too. i know we can do this. whatever your political party, let's come together for the sake of our country. let's give this effort everything we have. let's get this done and elect mitt romney the next president of the united states of america. thank you, everybody, and god bless you. [applause] thank you. thank you. >> c-span will have live coverage of all the presidential debates beginning in october as well as the vice-presidential debate between paul brian and joe biden. that is scheduled for thursday,

october 11. it is live on c-span, c-span radio, and c-span.org. >> i think people really like to see where politicians views have shifted over the years. people like to see whether mitt romney 1994 was campaigning for welfare reform, against welfare reform, for abortion, they seek -- want to see 2002, 2007. there is an element to it that is almost a gotcha element. >> i have tried to think why it is that he has changed so often. what he finds it difficult to come down on one side of an issue.

>> does it help there were was a governor named rod blagojevich that your name is barack obama? >> the best way to describe it is the viral beating heart of the internet. >> more tonight at 8:00. on thursday, ben bernanke announced additional efforts to stimulate the economy. the fed will continue to monitor economic and financial indicators over the next few months to determine if more needs to be done. this is 50 minutes.

the united states enjoyed price stability until the 1990's and continues to do so today. the employment situation remains a grave concern. it is not growing fast enough to make significant progress reducing the unemployment rate. fewer than half of the 8 million jobs have been restored. at 8.1%, the unemployment rate is nearly unchanged since the beginning of the year. the weak job market should concern every american.

high unemployment imposes large ship and entails a tremendous waste of human skills and talents. 5 million americans have been unemployed for more than six months and millions more have left the labour force. they have given up because they have not been able to find suitable work. as skills atrophy, they find it increasingly difficult to get good jobs. and also to the detriment of our nation's productive potential. they have provided unprecedented levels of policy accommodation in recent years. it with the main policy interest rate near the effect of lower bound, we have tools to

carry out monetary policy, balance sheet actions, and guidance for how we anticipate exceptional levels. while providing this support, we carefully weigh the benefits and costs and recognizing the monetary policy in current circumstances cannot cure all economic ills. there are several actions taken this year. in january, they extended for guidance, anticipating the rate will remain near current levels until 2014. in june, the committee decided to continue the program to establish the average maturity by buying longer-term securities and selling an equivalent amount of shorter-term securities. the modest pace of growth continues to be inadequate to generate much progress. with inflation anticipated at or below objectives, the committee is convinced that further policy is warranted to strengthen the recovery in support the games we have begun to see in housing and other

sectors. we have decided on new actions related to securities and extend the for guidance regarding the federal funds rate. the committee decides to purchase additional mortgage- backed securities at a pace of $40 billion a month. the new purchases combined with the existing maturity extension program and the continued reinvestment already on the balance sheet have about $85 billion each month for the remainder of the year. the program of purchases should increase the long-term interest rates more generally and also mortgage rates that will provide further support for the housing sector.

the committee also took two steps to underscore the commitment ongoing support for the recovery. first, the committee will closely monitor information on economic and financial developments in coming months. if we don't see substantial improvement, we will continue the purchase program, undertake additional asset purchases and apply the policy tools as appropriate. we will be looking for the broad based growth in economic activity to signal sustained improvement for declining unemployment. in determining the size, pace, and composition, we will take appropriate account of the inflation outlook for the efficacy of costs. the committee emphasized that it expects a highly

accommodative stance of monetary policy after the economic recovery strengthens. the policy of accommodation will remain even as the economy picks up. the federal funds rate, it anticipates the low level for the federal funds rate is likely to be warranted through 2015. they submitted their individual economic projections and policy assessment for the years 2012- 2015 and over the longer run projections for the unemployment rate have a central tendency of a 0.0-8.2%, declining to 6.0- 620% in 2015. it remains somewhat above the normal rate of unemployment. there is a central tendency for

1.7%-1.8% for this year. while the economy appears to be advancing at a moderate pace with some improvements, participants in economic outlook remains uncertain. the economy continues to face economic headwind including the situation in europe, tight credit, and fiscal contraction at the federal, state, and local levels. in addition, markets continue to pose downside risk. before i take questions, i would like to talk about the accommodative monetary policy. the first is the notion that purchases are akin to a fiscal spending. the second is that rates hurt savers. the third is policy risk and

inflation down the road. on the first concern, i want to emphasize they are not comparable to government spending. the federal reserve buys financial assets. ultimately, it will normalise the balance sheet by selling back into the market. the federal reserve's earnings are remitted to the treasury. the odds are strong that the asset purchase program by strengthening rather than reduce the debt. on the second concern, my colleagues and i are very much aware of assets like certificates of deposit are receiving very low returns. a healthy investment returns, it is difficult to say without the income from a job. the interest rates imposed some costs.

from a healthy and growing economy, and finally caught on inflation. food and fuel prices caused by drought and a geopolitical tensions. however, overall inflation is averaged a very close. the federal reserve is fully committed to both sides of the mandate, price stability, and a maximum employment. it has the tools and the will for price stability. i would happily respond to your questions.

>> your forecast doesn't get back to full employment for four years. can you give us a better idea of if you will have specifics in mind? >> we will be looking for signs that the economy is strong enough for labor market conditions. we will not be able -- to help the economy began to grow quickly enough and reduce the unemployment rate. that is the criteria we are looking at.

>> there are not any specific economic conditions that are described. can you describe what those can be? or is the fed reluctant to have done that so far? >> we have been talking about communications and trying to think about how to indicate to the public what the policy function is. we haven't come to a set of numbers or data that we can put out. what we try to convey here is that we are not going to be premature. even after the economy starts to recover and the unemployment rate moves down, we're not going to rush. we will give it some time to make sure the recovery is well established. >> i want to talk about the same line in the statement. the that mean that your tolerance for inflation will be higher in the middle of the

recovery? and what good is that language? it doesn't tell people that the reaction to inflation has changed. stock prices are up today, so our oil prices and gold. wire those part of the same reaction to the fed's acts? >> our policy approach doesn't involve intentionally trying to raise inflation. it will want to provide enough support to that the economy will grow fast enough to bring unemployment down over time. we have seen unemployment the same place where it was in january. not enough jobs growth to bring down the unemployment rate, but what we need to see is more

progress. that is what we will be looking at. we think, by that point, the economy will be recovering and we will be providing the support it needs. it doesn't involve any inflation and we believe it will be close to the 2% target. >> to follow up, you say that it does not include a greater tolerance for inflation. you will reverse course if inflation is above target level? >> if it goes above target level, we take a balanced approach. we do it in a way that takes into account the deviations of both of the objectives from the targets. >> earlier this year, the fed took policy action for the economy. but there hasn't been any improvement in the market since the beginning of the year. why should people believe this will make a difference?

there is possibly a point for reduction in unemployment. is that the limit to what the policies can do going forward? >> i talked about this, the assessment is that the research literature says that the policies we have undertaken have had benefits for the economy and they have provided some support. they have eased financial conditions and help reduce unemployment. monetary policy is not a panacea. it's not able to -- we will do our part and try to make sure unemployment moves in the right direction. we can't solve this problem ourselves. >> [inaudible] >> what happens will depend on where the economy goes. the 0.4% you're referring to, the change in the forecast, remember that people make projections assuming that policy is appropriate.

not all are assuming these policies in this projection. it is probably a little bit of an understatement of what we can get. i want to be clear that while we can make a meaningful and significant contribution, we can't solve it. we don't have tools strong enough to solve the unemployment problem. >> an adequate explanation over the past couple of weeks of the fed's ability to lower interest rates. what is missing from any economist is how the transmission mechanism is going to work. most people think this will have a minimal effect on rates. do you know how much it will push rates down? and how few basis points might change demand which seems to be a problem in the economy. >> it will depend on how much we

end up doing and what the economy does. we will be providing accommodation according to how the economy of balls. the virtue of putting it this way is we will provide more support. if the economy strengthens on its own, it will require less support. the amount of support we provide will depend on how the economy evolves. we think that these policies can bring interest rates down. not just treasury rates but mortgage rates and the rates of corporate bonds and other types of important interest rates. it also affects stock prices and other asset prices. looking at all of the different channels, we think it does have impact on the economy. it will have an impact on the labour market. the way i described it, significant effects.

not a panacea. we don't want to stagnate at high levels of unemployment, we want to make progress. >> mr. chairman, is this the limit of what the fed can do? you refer to policy tools. if it doesn't improve, what will there be available? >> a variety of possibilities and we continue to look at different options. the tools i discussed our balance sheet actions and we can change those in various ways. the other tool is communication tools.

we continue to work on how best to communicate with the public and assure the public that the fed will remain accommodative long enough to restore a recovery. working with communications tools, and economic conditions might be one way in which they can further provide accommodations. >> i want to go back to the transmission mechanims. that seems to be the they could not see how thatade. help the economy. i think there is a fear that the policy is helping wall street but not doing much for main street. can you describe how it is really different for trickle- down economics where you pump money into the banks and hope that they lend? >> we are about trying to get jobs going, trying to get more employment. that is the objective. the tools that we have involved affecting financial asset prices and the tools of monetary policy.

a number of different channels, mortgage rates, interest rates, corporate bond rates. the prices of homes, to the extent that home prices began to rise, consumers will feel wealthier and feel more disposed to spend. people might be more willing to buy homes because they will make a better return on that purchase. stock prices, many people own stocks directly or indirectly. the issue here is whether or not improving asset prices will make them willing to spend. one of the main concerns is that there is not enough demand. people feel that their financial

situation is better because there 401k looks better or their house is worth more and they are willing to go out and spend. there will be willing to hire and to invest. >> mr. chairman, the statement says we have come back from this a couple of times. if the outlook does not improve substantially, they will have additional asset purchases. it can you define and describe more specifically what improved substantially? and what is the committee

referring to when it says additional asset purchases? >> we are looking for ongoing sustained improvement in the labour market. this is not a specific number that we have in mind, but we have seen the last six months is not in it. we're looking for something that involves unemployment coming down in a sustained way because i don't know our tools are that strong. we would like to see an economy that is strong enough that it will support the improving labor market conditions. that is essentially what we are looking for. in terms of the tools that we have, the mortgage-backed security purchases that we can continue to expand or change, we can purchase forced treasurys. in terms of other policies, there are a number of possibilities. that is our communications policy, to better explain our rate policy that will engender more accommodative financial conditions.

>> it is clear that there is a good deal of confusion about how long you will keep buying assets. why did you choose not to adopt a specific target? did the committee consider specific targets? why did you choose not to do that? >> the problem is that for this purpose, what we're looking for is a general improvement for labor market conditions. we want to see the unemployment rate come down, but that is not the only indicator of labor market conditions. the unemployment rate fell

because participation fell and that is not necessarily a sign of improvement. we want to see a stronger economy that can cause the improvement to be sustained. they're not going to be looking for wiggles and the numbers to radically shift to the policies. they decided to define its qualitatively. i will give you a least a little color in terms of what we have been looking for. an economy that is quickening. it gives signs of continued improvement. it allows labor markets to be stronger. and that will be the qualitative criteria that we look at. again, we don't have a single number that captures that. we anticipate that we have to do more and we will do enough to make sure that the economy gets on the right track. >> hi, mr. chairman. someone told me less than 1% of mortgages went to borrowers with impaired credit history. when we talk about main street policy, it seems that you are struggling like many central

banks because the challenge is to get them to people that really need them. companies with somewhat fragile balance sheets. given that is the case, you guys got involved in markets when they were dysfunctional. what is your appetite for doing more targeted credit programs? you had a treasury secretary in the congress that is willing to override some of the credit risk. >> you're talking about congressional programs and i don't advocate specific programs. it is up to them to make those decisions. we are seeing a modest improvement and one thing that is helping is the stronger housing market. lenders are worried about

further housing constraints that will make the collateral worth less than the loan. as house prices rise, lending standards have eased a bit. there are other changes that are useful. i know that the fhfa has changed their policy on putbacks. there are things that will make the market more open. that is one factor that could make the policy more effective at not less effective overtime. more people can take advantage of the low rates that we are finding.

>> mr. chairman, one of the innovations is that you have predicated york action on the achievement for explicit economic goals and the labour market. can you give us some explanation as to how that conditioning will make your policy more effective than you have previously? had a technical question. when operation twist and, do you anticipate adjusting the size of your asset purchases to maintain the monthly flow of long-term asset purchases? >> we will be looking at the whole set of asset purchases in order to make decisions. in particular, what is the state of the labour market and the outlook for economic growth? our policies have always been conditional in that we have always been clear that the asset purchases or reviewed

periodically to see if they were still necessary. we did extend the maturity program. our policies have an element of conditionality. the idea is to make that more transparent to the public and make it more obvious that the fed will do what is needed to provide support for the economy. we hope that when it will do is try to get more assurance or convents that the fed will be there to do what it can. we are not promising a cure, but what we can do is provide some support. by assuring the public that we will be prepared to take action if the economy falters, we are hopeful it will give confidence to spend. >> just to follow up on the question about getting back to

full employment -- it looks like there is a lot more work to do here. i want to ask about your plans as fed chairman. your term expires in january of 2014. governor romney's comments notwithstanding. what are your plans? do you plan to leave at that time? would you consider an appointment to a third term at the fed at all? on election year politics, if you have any concern, or was there any discussion in the committee, about whether your actions today might be perceived as helping president obama, helping the economy, and thus helping president obama get reelected, and her acting governor romney's chances in the presidential contest? >> on the former, i am very focused on my work. i do not have any decision or information to give you on my personal plans. on the politics, we have tried

very hard, and i think we have been successful at the federal reserve, to be non-partisan, to make our decisions based entirely on the state of the economy and the needs of the economy for policy of accommodation. we just do not take those factors into account. we think that is the best way to maintain our independence and maintain the trust of the public. >> chairman, i am with "american banker." community bankers, as you know, have been worried about the impact of these rules on their banks, especially given industry consolidation. some have questioned whether or not the fed has looked at the impact the rules would have on smaller-sized institutions. the question is, will there be relief for smaller institutions? can you provide assurances will not be a one-size-fits-all

regulation? >> certainly. we are very interested and focus on community banks at the fed. we believe they play an important role in our economy, in our communities. we have a number of ways of communicating with community banks. that includes our advisory council, made up of community bankers. it includes a special set of programs we have to reach out to talk to community bankers. we are very interested in their views. i talked to various groups regularly. in terms of [indiscernible] it is not one size fits all. many of the most difficult, complex regulations apply only to the largest and most complex institutions. the capital surcharge the largest banks have to hold. the complex rules applying to trading books in derivatives.

the extra supervision under section 165. the liquidation authority. the liquidity rules. the whole range of things that apply only to the largest and most complex banks. for the smaller banks, what our proposed rule does is try to strengthen their capital. many small banks will already meet those capote requirements. small banks tend to be very well capitalized. that is important for small banks as well as large banks. there is a leverage requirement. most of the rules, particularly the most complex rules, will not apply to smaller banks. banks under $500 million of special exemptions from these

rules. having said all of that, i will remind you that we have a proposed rule. we have a division of the committee a community bank supervisor who are particularly interested in making sure the rules are not excessively onerous. who will be looking at the cummins and trying to make sure we take into account the needs of community banks when we put out the final rules. >> thank you, mr. chairman. yesterday, the former fed governor, larry myers, at a conference in washington, said he had never seen such a divided fed. we have seen it. in the speeches to the run-up to today's decision, some people said it was dubious whether qe three could work. can you comment? do you wish that some of the fed officials that do not support qe would keep their fears to themselves? thank you.

>> as you know, we are living in a very complex time. we are dealing with a complex economic situation, and a variety of novel and different issues, including new policies that have not been used in the same way in the past. we have a range of views, a range of opinions. i think, on the whole, that is probably a good thing. it is good to hear different points of view. it is good to make sure the points of view outside the fed are reflected around the table inside the fed. we have a very collaborative and collegial discussion process that spans a range of views. we were, however, able to come to a pretty good consensus. as you know, the vote on this was 11-1. that is a sign that the broad center of the committee does support these actions, and will continue to support them, going forward.

>> has the negative commentary hurt qe, if people in the market do not think it can work? >> there is going to be negative commentary, whether it comes from fed officials are not. because there is a range of views, some people say it is more affected than others. i discuss some of the evidence in my speech at jackson hole. different researchers have gotten different estimates of the impact. virtually all of them find some beneficial impact. they disagree on how much. there is going to be disagreement. i personally do not think it is a panacea. i do not think it is going to

solve the problem. i do think it has enough force to help nudge the economy in the right direction. >> you said you cannot cure all ills, but you have strong tools to deal with the unemployment problem. i was curious what the policy actions you would like to see outside the fed to address this. how concerned are you about spending cuts and tax increases? what do you have to do with this problem? >> a range of areas where actions can be taken. i cannot really describe all the possible responses. they would focus on the fiscal side. there is going to be a substantial increase in taxes and a cut in spending on january 1 of the coming year.

the cbo has suggested if that is allowed to take place, it would cause unemployment again to rise, and it might throw the economy back into recession. a basic thing that could be done to help address the recovery, the weakness of the recovery and the need for more employment, would be to address the fiscal cliff, while simultaneously addressing longer-term sustainability issues, which remains serious. that is an area where there is a lot of potential benefit. if the fiscal cliff is not addressed, as i said, i do not think our tools are strong enough to offset a major fiscal shock. we would have to think about what to do in a contingency. i think it is really important for fiscal policy makers to work together to try to find a solution for that. >> i am with a german newspaper. in the economic inflation projections, you for see a low inflation rate below 2% for 2015.

if you look at the growth rates, we have growth rates of about 3.4% in 2014 and 2015. how long do think it might work that you how no inflation? the second question is, a lot of economists do not see too much effect of of a further round of qe3. aren't you worried, as this goes so long, to come down on that side of the policy action?

>> on inflation, we anticipate, at some point, what is normal in a recovery. given that the economy fell very quickly and there is a lot of unused capacity, it would be normal to go through a time when the economy would grow faster than trend to make up some of the slack that was created. we do not anticipate the economy is going to overheat any time soon. as long as we pay close attention to inflation expectations, as well as the trajectory of the economy, we think inflation will remain close to our 2% target. on your second question, certainly, there is our range of views on how effective these tools are. i have spent a lot of time, as my colleagues have come out looking at the evidence. the staff have done a great deal of work on the question. the bottom line for most of the research is that while these tools are not so powerful they

can solve the problem, the ark at least able to provide meaningful support to the economy. our job is to use the tools we have to meet our mandate, which is a maximum employment and price stability. if we have tools we think can provide some assistance, and we are not meeting our mandate, i think our obligation is to do of course, we would like to see policies across the board to help address these issues. but that is not our province. we are the monetary policy authority. our job is to use monetary policy as quickly as we can. >> steve of mni, mr. chairman. there have been questions raised by a columbia professor

michael wilford and others about the credibility of your forward guidance on the future path of the federal funds rate. the idea being that to an extent it is conditional. it is not really convincing, and does not provide the kind of confidence you referred to. in this latest statement, you have removed some of that conditionality. it says it will remain appropriate for a considerable time after the economic recovery strengthens. i assume that was done to make forward guidance more credible. if the question remains, as the economy picks up steam, whether the fomc will follow through and keep rates low, or whether you will do as the fed has always

done and began to raise the funds rate. >> i know his work quite well. i think the thrust of his research is that forward guidance, communication about future policy, is the most powerful tools central banks how when the interest rate is close to zero. he advocates policies like nominal gdp targeting that would essentially require credibility lasting many years. the implication being that the fed would target the nominal level of gdp and promised to do that for many years in the future, even if inflation grows as part of that policy. his own perspective is that

credibility is the key tool that central banks have in order to get traction at the zero lower bound. whether we have the credibility to persuade markets that we will follow through is an empirical question. the evidence, which i discussed in my remarks recently, is that when we have announced extended guidance, financial markets have responded to that. private-sector forecasters have changed their estimates of what unemployment and inflation will be when the fed begins to remove accommodation. the empirical evidence is that our announcements do have considerable credibility. i think there is good reason for that, which is that we have talked a lot, both publicly and privately, about the rationale for maintaining rates low even if the economy strengthens. i think the basic ideas are broadly espoused within the committee. there is a consensus that even as personnel change and so on, going forward, that this is the appropriate approach. if i follow it through, we will have created a reserve of credibility that we can use in

any subsequent episodes that occur. >> i am with "the l.a. times." with mortgage rates already at historical lows, how much further do you think your actions would drive down the rates? related to that, i am assuming that you expect to purchase mortgage backed securities to have a meaningful effect on refinancings. what would that look like? what would a meaningful effect be? >> as i mentioned before, it is true that our mortgage backed securities purchases of to drive down mortgage rates and create more demand for homes and more refinancing. it will depend, ultimately, on several things.

one would be on the amount we do, the amount of purchase. that is going to be a function of how the economy evolves. if the economy is weaker, we will do more. probably rates will be low in any case, because the economy is looking weak. if the economy is stronger, strong enough to create improving labor market conditions, we will not have to do as much. the amount we do depends on how the economy evolves. i do not know how much we will end up doing. it is hard to give you an exact estimate. in terms of how many homes, and those kinds of questions, i think the markets are looking a little better. i think house prices are beginning to rise in some markets, which will encourage people to look at homes, will encourage lenders to make mortgage loans. i am hopeful we will see

continuing progress in the housing market. that has been a missing piston in the engine. housing husband a big part of our recovery process. to the extent that we can support housing, i think that would be a very useful outcome. >> there does not seem to be that many people who could qualify for refinancing. can we expect a meaningful effect on increasing that refinancing activity? >> i think there will be some. you get more benefit when people buy homes. sales of homes are down, but they have been rising steadily. we are trying to provide more support for people who want to go out and buy homes, construct homes, and also those who want to refinance.

it is the purchase of new homes that generate construction activity, the furnishing, all of the things that of the economy grow. >> i am with cnn money. earlier this year, at a news conference in this room, you said you were already hearing anecdotal information from colleagues at regional fed banks about firms, companies, making decisions on hiring next year, because they were afraid of the fiscal cliff, or whatever the federal government was going to do in terms of cutbacks. it has been a few months since you made that statement. i am sure your staff are working hard on it. how much of a head wind to the economy is the fear of the federal government's cutting way back, falling across the fiscal cliff beck's even if they take a

few steps back from the cliff, it is still there. how much is a contributing to lack of growth, or lack of adequate gdp growth? >> it is hard to give a number, but i can confirm, as the reserve bank presidents and governors made their reports today and yesterday around the table, there was considerable discussion of uncertainty, including policy uncertainty, fiscal policy uncertainty, and the implications for hiring and investment decisions. a lot of firms are waiting to see whether that problem will be resolved. if so, how? i think it is a concern. it is something that is affecting behavior now. i do not have a number. i do not know how big the effect is. the sooner that can be resolved, the sooner that can be clarified, that would be

good. not just because we avoid the cliff itself, but because we clarify for firms, employers, and investors, how that is going to be involved. it will be an issue of some consequence, yes. >> national journal. how much was the fiscal cliff a factor in your decision to do an open ended to leave? for fiscal in some-- open ended qe? for fiscal uncertainty in general? >> a lot of headwinds are affecting the economy. there are international factors, including the situation in europe. there are factors are rising from still-impaired credit markets, and so on. we looked at that. we looked at the economy from

the perspective of how quickly it has been growing over the last six months to a year. as i talked about in a speech in march, in order for employment gains to be sustained, for unemployment to fall, the economy needs to grow at or above current levels. lately, it has not been at where trying to take steps to ensure stronger growth and we hope it will bring unemployment down over time. the uncertainty about the fiscal click is one of the headwinds, but we are sure their brothers. we do not try to differentiate. if the fiscal cliff does occur, my hope it will not, but we get the kind of impact the

congressional budget office is talking about, i do not think i have the tools to offset that. we would have to rethink at that point. we have taken the steps we have taken now because we would like to see the economy get more momentum. >> i'm with the associated press. one of the aspects we have seen in recent report on unemployment is the shrinking labor force. is that something that is of specific concern to you? what does it tell us about the labor market and the economy? >> there has been some decline in participation.

it is expected. we are an aging society. we have more people retiring. female participation has flattened out. it has not continued to climb as it did for several decades. we have seen less participation among younger people, your college students taking part- time jobs and the like. part of this decline in participation was something we anticipated quite a long time ago. part of this reflects the fact that some people, because they have essentially given up or are very discouraged. some people could come back in to the labor force and they might temporarily raise the unemployment rate because they are not looking again. the participation rate over and above the downward trend is just

one of the other indicators of a generally weak labor market. it's why i said earlier that we do want to look at a range of indicators, not just the unemployment rate, although that is a very important indicator, not just peril. participation, hours, part-time work, and a variety of other measures suggest that the labor market is still in quite weak in the condition. >> thank you very much. thank you. c-[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> both chambers return on wednesday due to the observation of rosh hashana on monday. votes will happen after 6:30. there has been blocking obama's recent changes to the health care law. also expected, a package of

bills aimed at boosting energy production and job creation. follow the house live on c-span. the senate gavels in at 10:00 a.m. wednesday to continue work on a veteran's job but bill. it will train veterans looking for civilian jobs and give them priority in hiring for several jobs. last thursday, the house passed a continuing resolution to fund the government for six months. the sun always on c-span2. coming up this afternoon on c- span, watch the "newsmakers" interview with house appropriations chairman harold rogers. we talk about the resolution to fund the government for six months as well as the pending mandatory spending cuts that go into effect on january, known as sequestration.

>> a former member of the simpson-bowles fiscal commission, senator coburn says he is not worried about the fiscal cliff. the series of tax increases and budget cut scheduled to take effect in january. he made these remarks at an event hosted by the rivlin society, named after a town in wisconsin, the birthplace of the republican party. [applause]

>> good morning. for those of you i have not met, the president of this great organization, the ripon society. we take their name from a town in wisconsin where the republican party was born 100 years ago. we are created on the values of abraham lincoln and teddy roosevelt, the society with the first major organization to support the civil rights act of the 1950's. today, one of the main goals of our organization is to promote the idea is we believe have made our party and nation great. these ideas are keeping america's secure, taxes low, and

having a federal government that is not only smaller but smarter and more accountable to its people. before i begin, i would like to reflect on the event 11 years ago today that changed all of our lives as we know it. for those who has stock price did continue to risk their lives -- risked their lives in the nation today. a moment of silence. if you decide to go to ground zero, make sure you do one thing. you have to have tickets. go online to do it. it's all about crowd control. the number of people to go to new york and have to decide

that. you have to have tickets. it's one of the most moving things i have done as of late. the former undersecretary for the department of energy. bud. [applause] and from the office of congressman tom platt, his chief of staff. thank you all for being with us. finally, i would like to call your attention to our next upcoming events. we will be hosting an event with senator bob corker of tennessee discussing the financial reform legislation and other items being concerned before the housing and urban affairs committee. please note that will be on the other side of the capital at the

monocle. i hope you can join us for that. as for this morning's breakfast, we are joined by a physician, an author, and most importantly, a fiscal conservative in the senate leading an effort to fight our nation's mounting debt. to introduce him, it's my pleasure to bring the president of the healthcare leadership council. please welcome mary greeley. >> it is my absolute pleasure to introduce senator tom coburn. in an era of what seems an opulent culture of spending in washington, you have done more to restore fiscal restraint. from an early age, he understood the value of a dollar and was able to grow his family-owned business to one of prominence

before entering medical school. upon coming to washington, this businessman turned position successfully used his time in office to provide fiscally responsible solutions in an era lacking such common-sense accountability. during his first term in the senate, no other senator introduced more amendments to bills to fight wasteful spending earning him the reputation of an ardent a government watchdog and a crusader for spending transparency. this reinforced his commitment to private sector solutions. it continues to practice medicine today on a pro bono basis. this morning, senator coburn will be discussing his most recent book, a bold plan to stop

washington's from bankrupting america. he has offered to us very innovative health policy solutions that would not only improve the quality of health care but what also helped curb costs. the senator is a member of the senate finance committee and comes before us today really in a very unique position to discuss the looming fiscal cliff. although the congressional says he wears the epithet of obstructionists like a banner of honor, i you dr. coburn as a legislator that is working and fighting hard to find solutions to the important challenges in america today. please join me in welcoming dr. tom coburn. [applause]

>> good morning. the ripon society in oklahoma, we call it the "rip on" society. i think i have had this pleasure before. i want to spend some time -- i had a discussion at my table is about the fiscal cliff. i hope somebody will ask some questions about that as we get into it. i wanted to remind you what mike mullen said about six months before he left as chairman of the joint chiefs of staff. he said the greatest threat to

our country is no outside force. it is not china. it is not russia. it is our debt. at face value, that does not seem like much. here is the leader of the strongest military force the world has ever known telling america that the number one threat to its existence is its debt. that is profound for a military leader to say that. the president did not say that. the head of the joint chiefs of staff said that. to me that makes it all the more powerful coming from the source of our defense posture. history has shown time and again that that can bring down republics.

as a matter of fact, all republics by. name one that has not. -- all republics die. the question is, can america achieved history? can we cheat history and not fall? let me give you some reminders of what john adams warned. he said democracy never last long. it soon wastes, exhaust, and murders itself. there has never been a democracy that has not committed suicide. we are on the cusp of being the

first generation of americans to break a moral bond that has continued in our country since its founding. that moral bond is to create a situation and leave a situation for those that follow us that enhances their opportunity, enhances their liberty, and enhances their freedom so that they combined for some responsibility and hard work, those opportunities can bloom into a flower of abundance for them and their generation that follows. this is the first time in history we have ever been where we are. a couple of points. the size of the federal government is twice the size it was 11 years ago.

clinton was the last budget was one trillion $637 billion. we were at $3 trillion 850 billion in this last year. our deficit last year was better than the government was in totaled 15 years ago. consider linkedin's warning before becoming president -- consider lincoln's warning. he said this. at what point should we expect the approach of danger? at what point should we fortified against that? should we expect a trans- atlantic military giant to crush us at a blow? never. all the armies of europe, asia, and africa combined with their military chest could not by force take a drink from the ohio or make a track on the blue ridge mountains. and 1000 years this could not occur. at what point is the approach of danger to be expected? answer that if it is ever to reach us, it must spring up amongst us. it cannot come from abroad. if destruction be our lot, we must be its author and finisher. as a nation of free men, we must live through the time or die by suicide. that is a long winded way of saying exactly the same thing john adams said. the question for us as a nation is, what are we going to do about it? are we going to cheat history? are we going to play the political game?

are we going to think short term? are we going to make the difficult choices that will set our country back on its feet and create the opportunities and freedom and a potential that was given to us. before you get too depressed and pulled the prozac out of your purse or pocket, we do not have a problem in front of us that is not solvable. that is what nobody is focusing on. next week we will release $70 billion worth of savings from the pentagon that come out of the pentagon that have nothing to do with defending this country. think about that for a minute. i can find $70 billion in the pentagon and has nothing to do

with the offending the country that can be taken out of the pentagon and you will not say one chip plus, one trooper was, when the airplane was, you will not see flying hours reduced, you will not see anything reduced. i can find $70 billion. if somebody los -- if somebody else looks the can find another $50 billion. our problems are made more difficult by our politics. our problems are not unsolvable. some predictions. we are going to see further downgrades on our debt. i remember a phone call i got from the treasury department after a predicted seven days before it was going to happen that we were going to get a debt downgrade. i was told "quit saying that." i said, the truth does not hurt us.

the truth is the thing that will set us free. the fact is, we do not act responsibly and in washington as long as we are not addressing the long-term problems facing our country. as long as it is about the best -- the next election and not the next generation, we are irresponsible. it is already happening if you think about it, what is going on in our country. i brought with me a zimbabwe $100 trillion note. this is worth about 3 cents. that is a real zimbabwe note. think about that for a minute. what is happening right now? what is happening that will impact our kids? it is the way most governments handle the problems? it is called financial repression. it is occurring right now.

every retired couple up there with a home and a 401k, the purchasing value of the last four years in a row has gone down, not counting the recession. the net to they can earn versus inflation, they have a real negative net. net negative earnings on their 401k. what comes from that? the debasement othe currency. the federal reserve's balance sheet is in excess of $3 trillion. how will we sterilize that debt? what is going to happen? what happens when the bond holders of the world lose confidence that we can in fact repay our debt? our historical interest rates on our debt are about 5.58%.

we're paying 1.8% now. 4% times $16 trillion is $640 billion a year in additional interest cost. the time is short for us to fix our problems. the point i would make is to the solutions are not difficult in terms of figuring out what to do. what is lacking in washington is leadership. leadership that is willing to confront honestly the american people and tell them what the real problems are and to come forward with a positive solution and an attitude that says, we in fact can solve these problems. we can protect those that need to be protected, and we can in fact keep that moral bond for our kids and grandkids and cheat

history. i think we can do it. we are just waiting for the right leaders to stand up and say, let's do it. let's think about the future, not about now. i will not give you any more of the negative. i have plenty of it. you do not need that this morning. what i will tell you is that i see great hope. i had my seventh grandchild over the break. it was the first one that had my last name in their name. really proud moment for me. i sat and saw that little boy, now four and a half weeks old. what is his future? who is going to shape in washington? who is going to take the risk? who will take the political risk to do what is necessary to fulfill the great promises that were created when people sacrifice their honor, their lives, and their fortunes to create this great country? who will do it?

will you? will you be a part of the solution rather than part of the problem? i cannot but hope that the message of this next election cycle is, quick thinking about yourself and start thinking about our country. do what is necessary. you do not have to give -- you do not have to get all your way, but fix it. if we fix it combined with the resources this country has, we will be back on top of the world for three or four more generations just by doing the simple things. it is of fixable. there is a solution. it requires leadership, and it requires risk taking.

when the political career of individuals in washington is more important than the teacher of the country, perhaps john adams and abraham lincoln were right. i think we are bigger than that. i think we are stronger than that. i think our children are worth more than that. thank you. i will take any questions that you have. [applause] >> you mentioned the fiscal cliff that is living. i think everybody is interested in you addressing that. >> i think the fiscal cliff is one of the smartest political strategies i have ever heard. i really do not think there is one. let me explain what i mean to that. is there a fiscal cliff? is there a date in january where things change? yes. in comparison, if nothing happens between now and then, the predictions are we might slip into a recession.

the real fiscal cliff is, we are already bankrupt. the real fiscal cliff is that nobody is thinking -- nobody is offering from the white house a solution to medicare. our biggest problem in front of our country is this demographic shift of which i am part, and the fact that the average couple puts $110,000 into medicare antics $350,000 out. you solve that problem tomorrow, and we do not need the federal reserve keeping interest rates artificially low. it will be low because we will be dynamically and fiscally healthy. there is the real fiscal cliff. what we have done is we have taken the focus and say, here is the short-term again. the real problems are all long term. their manifestations come in the

short term. they will be much greater two years from now if we do not fix it. if we do not send the signal that we are going to take care of the long-term problems, we can fix the fiscal cliff. it will not matter one year from now. the bond vigilante's will have already driven down the price of our bonds and our interest rates will be 6%. it is a perfect political strategy to take our eye off what the real ball is. social security is not hard to fix. medicare is very difficult to fix. it can be fixed. the health-care decision is a whole other discussion. you could have a five ripon breakfasts and not cover it.

i want to remind you, that is all short-term thinking. that is all 17, 18 months or less thinking. we need to be thinking three, four, five years and fix those. the short-term will take care of itself. if you think there is any problem with us -- if we had a solution for medicare tomorrow, the you think this economy would not bop? there is $3.80 trillion sitting on the sideline in this country. normally there is about $800 billion in business banking accounts. paul krugman thinks we ought to borrow another $1 trillion and create another stimulus. i think the stimulus we ought to have is recreate confidence and certainty and enter our country so some of that $3.80 trillion gets invested in real embarrassment that creates real wealth and creates real jobs. -- creates a real investment and real wealth and creates jobs. you have to do that by creating

confidence in the long term. i am not worried about the fiscal cliff. if we are fortunate enough to win, we will fix that. we will reform the tax code. we will create certainty. people will be able to see through the long cores and that it is once again safe to put money to work in this country. we will have a tax system that says you can bring your money home. we penalize at 28%. you can bring it home. that is one of the craziest things we are doing to. the head of eli lily. they have hundreds of millions of dollars sitting in europe. to bring it home as 28%. why would they do that? they invest the money where they are rather than invested in this country. -- invest it in this country. >> i understand your point. i think taxes pay a blond -- a

large role. regulations play a large role in the willingness of businesses to invest. i will cite my favorite statistic. it takes two and a half times more money per mile to lay a pipeline on top of the ground than it does 7,500 feet of water only because of regulatory rigid regulatory costs. do you see any path for the congress and senate taking back control of some of the regulatory overburden? >> my hope would be -- one of my frustrations as a senator, we write the bills. every bill we right, we leave the hard work to the bureaucracies.

we do not write what we really intend, because we really do not know what we are doing. we do not really write what we intend, because we do not have enough information. we have not studied the issue well enough to be writing the law in the first place. we give it to administrations that change. what we ought to do is we ought to write specifically what we expect into the laws. here is what you will do, here is how you will do it. that is instead of writing a general thing and say, let the bureaucracy figure it out. they do not follow congressional intent. they follow political intent of whatever the administration's

directive whether it be a conservative or liberal. i think one of the reasons we are in trouble is because of the lazy congress that wants to see short-term political expediency, was to be seen as doing something right, but does not of the issue well enough to do it completely. to do it in the correct way. i will never forget -- i will not tell you the situation. i had a conversation about productivity and how they tried to get more with less every year. there was a certain senator in the room who never heard of the concept. [laughter] the point being, look around at who the elected leaders are and ask yourself what their real world experience is outside of politics. it is very easy to figure out how we got where we are today. when the goal is the next election instead of securing

the future of the country, we have the results that we have today. that is both a republican and democrat problem. what america needs to wake up to is -- what the americans to have benefited from this country need to wake up to is time for you to serve it. if you have the broad levels of experience, come and use it in washington and give something back to the country. we have so many people that have so much potential that have real knowledge and real judgment who refuse to serve. i think that is part of a spiritual breakdown in our country in terms of an obligation to be a great citizen by actually sacrificing some of your time and your reputation -- this is not a position that gives you a great

reputation. the negatives always outweigh the positives. come and actually served. 70% of the senate has never had a job outside of politics. is it any wonder we lack judgment and discernment and real experience to apply to critical issues of our day? how did we get there? our founders were not that. the first 100 years were not career politicians. the average length of service was markedly less than two terms in the senate. we have created our own problems because we have an elite political class in both parties.

we come from a team of the exact same people. until we get people and office that have real world experience -- there is nothing wrong with serving. as i criticism of those individuals. i have great hearts, minds, and compassion. they have no real-world experience to make critical judgments. >> as a supporter of simpson bowles, what do you think of the criticism of paul ryan of simpson bowles. >> i do nothing much at all. they said from the start, unless you address the biggest problem in front of us which was mandated not to be addressed, which was medicare, that no matter what happened, they could not support that as a solution to the problem. that is not a solution.

it is a short-term solution. i voted for it to get it on the floor. the fact is, if you do not addressed it -- they said they would take the tax changes we put in that bill. it would agree to that. but you have to put medicare reform in. the only way to save medicare is to change it. it is a statistical, financial, numerical and possibility. i will tell you that i believe in less than four years from today, the trust fund will be out of money. medicare part a. the worst case scenario is 2022. i do nothing there are anywhere close. this large group of baby boomers of which i am a part -- they are holding off surgery's, holding off getting things done until they get into medicare. the consumption is going to explode. i do not think it will be there. again, i would say, some of it needs to be criticized -- if somebody wants to be criticized, it needs to be the president who appointed the commission who got a good result and refuse to embrace it.

>> i can understand how you might look at what everybody calls the fiscal cliff and see it not necessarily as the emergency that others do. what do you think will be the scenario with regard to the sequester itself? is this something that lawmakers have chosen to do as a last resort for their inability to make decisions about where to cut? or is it the recognition that the sequestered so big and that it might add a full point to unemployment, is that big enough for the congress and senate to revisit what happened? >> i think they ought to revisit it. a sequester is a chicken politician's way to solve a problem.

just cut everything the same amount. that you are not responsible for the good things getting cut. you are not responsible for continuing to fund lousy things. no discernment, no knowledge. we just issued a report -- there are 47 job training programs. we spend $19 trillion on these a year. why in the world do we have 47 job-training programs? we just issued a report and look at every federal job- training program and how it impacts oklahoma. here is what we found. there is not one successful federally run job-training program in oklahoma. there is highly successful state job training programs. we have a city a center oklahoma that has 16,000 people and has a 4.7% unemployment rate and 17 different job training offices in the city. what our job training programs are is a way to employ people a

in job training. i guess the point i am making is, it is not hard to fix this if you actually know. in our office nobody comes close to digging all of the issues in every branch of government on all the waste. the problem is, nobody reads it. my colleagues do not even know it. they do not even look at it. i mail it to everyone of them, and they have a staffer read it. nobody wants to say no, because there is a constituency for every program out there and there is election time. as soon as this election is

over, there is another election coming. i cannot dare offend anybody. i decided i will offend everybody. our children are worth it. my new grandson is worth it. for me to not be liked, but to actually call the truth would it is. at least one-third of what the federal government does -- at least one trillion dollars of what it does has no positive affect on the society whatsoever. it could go a way, and you would see growth like crazy in this country. that is the truth. i can show it to you. nobody wants to look. nobody that cast a vote once to look. hear no evil, see no evil, speak no evil as long as i get reelected. >> [unintelligible] >> those are all estimates. let's talk honestly. the defense department is the republican's -- it is to the

republicans as the same thing medicare is to the democrats. first of all, the cut in the pentagon is a cut from the expected growth. it is $468 billion and expected growth. so you cut us $500 billion. does not cut a penny. if you look at the budget control act, pentagon spending goes up. republicans speak about the pentagon -- i guarantee you we can have a better defense with less money. that is if we hold the pentagon accountable. nobody wants to hold the pentagon accountable because there are jobs in their districts that depend on the pentagon not being accountable. ask yourself a question. of the $350 billion a denture weapons procurement under contract right now in

development, why is $150 billion of a going to be wasted? where are the adults in the room? why is it at the pentagon when they are going to spend $24 billion on i.t. this year and $12 billion of it will go down the drain? the federal government will spend $46,000,000,000.19 $3 billion of it will go down the drain. where are the adults? where of the people that are taking -- who got fired because somebody -- something did not work? nobody.

there is no accountability. this is not the president's fall. this is congress's responsibility. congress has failed both under republican and democrat control. >> you said there are solutions and they are available. all it needs our leaders. you cannot wish leaders in. in the room you have now, where the leaders? >>chambliss, tomey, dick durbin will be a leader. he actually knows we ar ein trouble. that is a real revelation. dick is working hard to come to a bipartisan solution, as is mark warner. michael bennett. there are real leaders. the question is, will they take the political risk to get out there when a -- will they lead to get us to a bipartisan solution? i think they will. there has to be leadership from the president as says, we need to do this.

the american people are grown ups. this country has done hard things lots of times. this country never does hard things unless they are called to do it. we have never had anybody call us to do it. nobody has explained the predicate of what is at risk. the american people need to be talked to like adults. tell them the truth. instead of saying -- there is nothing wrong with losing an election. that is heresy in washington. if you are standing on principle and you lose, you advance the debate. the positive things that come out from losing an election by advancing the debate, that is why i offer amendments. i know i will not win. i offer them to advance the debate and to increase the knowledge across the country on

specific issues. i think people will step up. yes, sir. >> [unintelligible] >> well, if you go back to the reagan tax reforms and you look at what happened economically to our country, i will never forget i was a my medical office and i got my tax bill in 1986. i was really mad at ronald reagan. a lot of my deductions went away. what happened the next four years? we averaged 4.6% in real gdp growth with major tax reform. we change the incentive for investment capital. we create the confidence and uncertainty in the tax code. all of a sudden capital flowed.

that is what needs to happen. my personal belief is we ought to some said the present code. . sunset the present code. the reason is because we can get rid of the lobbying pressure of special interests in the tax code. if you sunset the tax code and say here are all the rates. if you want to add something back, here is how much the rates have to go up. lobbying to increase the rates is a lot harder than keeping a well heeled thing for a special interest group. take mortgages for example. they use $200,000 as a cut off on the mortgage deduction. that shows that the majority -- $200,000 and come cut off is below $200,000.

would you do it at $100,000, you find 75% of the tax deductions for those making over $100,000 a year. look at canada. canada has no mortgage interest deduction. their home ownership rate is 8% higher than ours. was our incentive to create home ownership? did it work? we ought to be asking fundamental questions. i am not say yes or die to a mortgage deduction, i am saying if you want to add a backing, -- yes or no to a mortgage deduction, if you want to add it back in, if the one state sales tax, who gets the benefits? what does it do to rates? let's make an informed decision about how to reform the tax code. ands create certainty confidence in the future.

let's quit having the highest corporate tax rate in the world. let's get rid of double taxing corporations. what we are doing is cutting our own legs off as we do that. we are not going to do what i want to do, which is a deadline it. just for a moment, $300 billion a year is what we spend to pay people to figure out what our taxes are. the economic multiplier on that is about 1.2. if he took the same $300 billion and put it into the economy you would get the 1.6 multiplier of fact. he would gain $120 billion of gdp a year just by reforming the tax code if you had no change in investment decisions whatsoever. that is one%. that is 1 million jobs.

the financial repression we are under right now with 90% -- actually we are at 103.4% as of yesterday debt to gdp ratio is suppressing our gdp by 40% right now. instead of growing at 1.8%, we would be growing at 1.3%. -- almost 3%. if we did not have that level of debt. you can talk energy. we are sending $300 billion to the middle east and venezuela a year. $300 billion of our energy -- we will burn in any way for at least 20 years. why do we not burn hours instead of theirs and invested here instead of over there. that is a no-brainer. regardless of your position on climate, we will still burn at. why do we not use ours?

it makes no sense. right there you have $600 billion that you could put right back into the economy tomorrow. talk about stimulus? that is what -- that is without even changing rates. our problems are not hard to figure out. the problem is the politics are getting in the way. it has been great to be with you. thank you very much. [applause] i thank you, senator. i will seawall on the 20th. >> coming up this afternoon at 6:00, watch "newsmakers" with hal rogers on the resolution to fund the government for six months as well as the pending mandatory spending cuts and going into effect in january. it airs at 6:00 p.m. eastern today.

>> i think people really like to see where politicians use have shifted over the years. i think people like to see whether mitt romney in 1994 was campaigning for welfare reform, against welfare reform or formed. they want to see what he was doing during his campaigns. people really like to see how these politicians have evolved. there is an element to it that is almost a "gotcha," but it is also incredibly interesting. >> why isn't he has changed so often, why does he find it so difficult to come down on one side of the issue. >> there was a governor named rod blagojevich. >> he has always been a hero of

mine. >> the best way to describe it is the heart of the internet. >> more with andrew kaczynski on "q&a." last week, facebook ceo mark zuckerberg sat down to talk about the future of facebook at the annual tech crunch even. he said his social networking's stock performance has been disappointing. he says this book is pushing hard on mobile technology and will dive into research at some point. he insisted there are no plans for a base looks on. this discussion is just over half an hour. >> please join me in welcoming to the stage of facebook founder and ceo mark zuckerberg and the tech crunch fund founder. [applause]

>> what is that? did i mess up already? there are a few more people in here. i think they want to hear what you have to say. welcome to techcrunch. >> thank you for having me. >> this venue probably looks familiar. you probably feel fairly comfortable. >> you get more people in here than we do. >> are you ready? a few questions to start. you went public on may 18th and the stock has lost half its

value roughly. >> just get right into it. [laughter] >> if you could have done anything differently with hindsight, would you have? >> the performance of the stock has been disappointing. we are going to do the things that we think are going to build value over the long term. over the next 3-5 years, the biggest question that is on everyone's mind here double determine our performance over that time is how well we do with mobile. we have been in this quiet period for the last six months or so. a lot has changed since then.

six months ago, we had not launched our new set of apps. apple had not announced the ios integration. we did not run a single ad on mobile. it is easy to underestimate how fundamentally good mobile is for us. that is one of the main things that i think is misunderstood right now. on a bunch of different levels. there are more users, obviously. per person who is using facebook on mobile, there is more engagement and they are spending more time. we think we a point to make a lot more money than we do on desktops. you can cut through all of these things.

the number of users is fairly obvious. 5 billion people in the world have phones. the number of smart phones is growing very quickly. in business, we already see that mobile users are more likely to be active users of facebook than desktop users. they are more than twice as likely to use facebook 6 out of seven days a week. there is a lot we can do there. and this is before we even want the most recent version of the ios app. that was a massive improvement. >> just to slow down. i want to unpack everything you just said, but it is going to take me what. i do not want to cut you off. >> i have 20 more minutes. >> you said so much.

just to jump back, i want to get rid of the ipo questions first. it is interesting, to talk about mobile. >> go for it. >> when you went public, he said "we don't build services to make money. we make money to build great services." >> yes. >> you really meant that. talk a little bit about that. >> yes. we really mean that. you know, the statement "we don't build services to make money. we make money to build better services" really goes to the philosophy that has been running the company. we are a mission-driven company. the thing that gets us excited is making the world more open and connected and the things we're doing to build that. but you cannot just focus on that, right? since the beginning of building facebook, one of the core things i have learned, in order to do this, we have to build a great team. in order to build a great team,

people want to have a great mission, but they also want to build a great platform. to build a great platform, we have to build tools so developers can build the things they want and make a bunch of money. to do that, we need to have a business model that incentivize them to work with us and does that for them. advertisers. that content is in the system because advertisers get good roi working with facebook. building a mission and building a business go hand-in-hand. we are about doing those. that is a key part of understanding our philosophy. >> ok. with the stock price fluctuations, are you finding you have to be creative in

incentivizing employees to keep morale up? is there a morale problem? how are you dealing with that in general? >> it does not help, but -- but look. there are a few things that are important to keep in mind here. first, facebook has not been and non-controversial company in the past. is not like this is the first up and down we have ever had. i think people are fairly used to the press and they are saying good things about us and bad things about us. we have a pretty good compass understanding -- here is what we need to build. we will stay focused on that. i always make a point when i think people are being too nice to was to get in front of the company and say a "hey, we are not as good as they say we are now." and when they are critical, i will tell them that we are not as bad as they say we are either. i keep that focus in mind. the second thing is we are

building things that we are brought up. this is universal. is hard for people to wrap their heads around, ok, i am building something that 900 million people are going to use. what resonates is i am going to build something i can show to my friends and family and they will be proud to do that. when we release apps, the new ios integration that is coming out, the camera app, it drives the company and it also drives a lot of recruiting. they will come to us and they will say "i want to work this place because you build some of the most interesting stuff out there." and that is the second thing keeping the third thing is we have not built on equity to incentivize people. we have been sticking to the normal path that we have. it is important for people to it is important for people to understand that new people